The EU will not take action against Chinese mobile telecom equipment makers including Huawei and ZTE, in order to maintain European manufacturers a place in the world’s second-largest economy.
The decision came on Thursday during Chinese President Xi Jinping's visit to Europe, when the European Commission announced it had ended an anti-dumping investigation into Chinese mobile telecommunications networks, according to a Reuters report.
In May, 2013, the European Commission started an investigation into Chinese companies including Huawei and ZTE, claiming that these Chinese telecom equipment makers were selling products to European mobile telecom carriers at substantially reduced prices and hurting the interests of local companies, including European telecom makers such as Ericsson, Nokia Siemens Networks and Alcatel-Lucent.
Trade Commissioner Karel De Gucht said on Thursday that the European Commission decided to drop the anti-dumping investigation, which is worth 1 billion euros (US$1.38 billion) per year, said the Reuters report.
The deal intends to "ensure European manufacturers maintain newfound access to the booming Chinese market," said a WSJ news.
The move is also part of "a broader deal to defuse trade tensions between the EU and China" during Chinese President's visit, the WSJ report revealed, adding that China has decided not to impose tariffs on European winemakers for dumping wine to the country last week, and it also withdrew a threat to place tariffs on polysilicon imported from Europe.
On Thursday, Germany announced China is one of its six key export destinations this year, said a Wenweipo news.
Currently, Ericsson, Alcatel-Lucent and Nokia own a total of 30 percent share in the Chinese telecommunications equipment market. The decision to drop investigation on Chinese telcos will help maintain these European companies' sales in the country, Wenweipo indicated.
Despite the EU no longer pursuing the anti-dumping probe, De Gucht, in the Reuters report, added government subsidies on these Chinese telecom equipment makers remain a big issue. "There are a number of demands we would like to see fulfilled before we can decide on the subsidies case," De Gucht said on Thursday.